The OFR proposes to amend existing rules and an incorporated form to conform with and implement Ch. 2022-178, Laws of Florida (Financial Institutions), signed into law on June 8, 2022.

 

DEPARTMENT OF FINANCIAL SERVICES

FSC - Financial Institution Regulation

RULE NOS.:RULE TITLES:

69U-105.102Application

69U-105.206Regulatory Standards for Evaluating Applications

69U-105.611Purchase and Assumption Applications

PURPOSE AND EFFECT: The OFR proposes to amend existing rules and an incorporated form to conform with and implement Ch. 2022-178, Laws of Florida (Financial Institutions), signed into law on June 8, 2022.

SUMMARY: The OFR proposes to amend Rule 69U-105.102, F.A.C., to revise incorporated form OFR-U-17. The form will be amended to include updated terms, and the rule will be amended to incorporate the term “target market.”

The OFR proposes to amend Rule 69U-105.206, F.A.C., to incorporate the term “target market.”

The OFR proposes to amend Rule 69U-105.611, F.A.C., to incorporate clarifying language and update cites in the rulemaking authority and law implemented sections.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: The Agency expressly relies on an analysis of potential impact conducted by persons with subject matter knowledge of this rule.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 655.012(2), 655.012(3), 655.414, 658.26(2)(a)

LAW IMPLEMENTED: 120.60(1), 517.051(5), 517.301, 517.311, 655.001(2)(c), 655.001(2)(d), 655.0322, 655.037, 655.0385, 655.0386, 655.057, 655.057(6), 655.411, 658.19, 658.20, 658.21, 658.25, 658.26, 658.33, 658.42, 665.013, 667.003

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN THE FAR.

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Ann Michelle Palecki, Office of the General Counsel, [phone], [e-mail]

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

69U-105.102 Application.

(1) The following application forms are hereby incorporated by reference.

(a) through (g) No change.

(h) Form OFR-U-17, Application and Plan for the Purchase of Assets and Assumption of Liabilities, effective  XX-XXXX 1/2018, herein incorporated by reference and available at https://www.flrules.org/Gateway/reference.asp?No=Ref-XXXXX 08789.

(i) through (l) No change.

(2) through (6) No change.

(7) Amendment of Application. An applicant may amend the application as to those factors generally within the control or selection of the applicant once, as a matter of course, at any time within 30 days from its receipt for filing. Otherwise, the application may only be amended with permission from OFR. A merger agreement may be amended at any time prior to its approval by the stockholders of the constituent financial institutions or decision by OFR, whichever occurs first. Requests to make adverse material changes filed at any time after the application has been received shall be deemed by OFR to be grounds for denial, and upon such denial a new application accompanied by the appropriate filing fee shall be required. Some examples of material changes include changes in the composition of the board of directors, officers, or stockholders of the institution; changes to the target market or primary service area location of the proposed license action; and fixed asset proposal. If OFR grants a request to make material changes in the application, the amended application will be treated as a new application with respect to the applicable rules of this chapter, except that no additional filing fee shall be required. When an application is denied on the grounds set forth above, the applicant shall be duly notified.

(8) No change.

(9) Applications to Locate in the Same General Area. All applications of a similar type for similar license actions within the same target market, general geographic or trade area, or affecting overlapping fields of membership which are filed within any 60 day period shall be processed and considered, as far as practicable, on a concurrent basis.

Rulemaking Authority 655.012(2) FS. Law Implemented 655.411, 120.60(1), 655.057, 658.19, 658.26, 658.42, 667.003 FS. History–New 11-1-77, Amended 3-12-79, 5-27-81, 3-28-83, Formerly 3C-9.02, 3C-9.002, Amended 8-14-94, 4-15-98, Formerly 3C-105.102, Amended 11-28-17, _________.

 

69U-105.206 Regulatory Standards for Evaluating Applications.

(1) No change.

(2) Standards. In making its determination OFR shall consider the following statutory criteria:

(a) Local cConditions indicate a reasonable promise of a successful operation.

1.  No change.

2. The business plan submitted by the applicant establishes the purpose, objectives, and business philosophy of the state financial institution, and is considered by OFR to be a representation of plans and expectations genuinely believed by the applicant to be attainable. OFR will review the viability of the plan in light of current conditions within the primary service area, the metropolitan statistical area or county, or target market, and in the financial institution industry in general, as well as the ability of the proposed board and management of the state financial institution to implement the business plan as outlined. It is the responsibility of the Board of Directors to conceive, develop, review, and approve the business plan. The submission of the plan to OFR constitutes a representation that the members of the board are familiar with the plan and understand its provisions. Any finding to the contrary may be grounds for a conclusion by OFR that the board lacks the business experience and ability necessary to indicate a reasonable promise of a successful operation.

3.  When the existing level of competition is great, the reasonable promise of success of the proposed new state financial institution is diminished unless other factors, such as a particularly strong organizing group with a demonstrably broad base of community support within the community or target market can serve to overcome the difficulties which stem from a highly competitive environment.

4.  Where the proposed board of directors has not made a significant personal investment in the stock of the state financial institution, the offering of the stock to the target market or residents of the local community have has met with a diminished response and, in several cases, the efforts to organize the state financial institution have been abandoned as a result. The proposed board of directors, in the aggregate, must subscribe to at least twenty-five percent (25%) of the initial shares of stock for OFR to determine that the state financial institution will have a reasonable promise of a successful operation

(b)  No change.

(c)  Proposed Officers and Directors.

1.  The proposed directors shall generally have reputations evidencing honesty and integrity and similar reputations within target market or the local community where the proposed state financial institution is to be located. They shall have employment and business histories demonstrating their responsibility in financial affairs. The fact that a proposed director has been adjudicated bankrupt or has petitioned filed for relief under chapters 7 or 13 of Title 11 of the United States Code the Federal Bankruptcy Act shall be considered a material factor in the evaluation of his responsibility in financial affairs.

2.  No change.

3.  At least five (5) directors of a proposed independent bank or association shall demonstrate strong and well-established residency and/or business ties to the target market or to the local community for at least the last five years prior to the date of the application, and shall represent diverse occupation and business interests.

4. through 6. No change.

(d) No change.

(3) through (5) No change.

Rulemaking Authority 655.012(2), (3), 658.26(2)(a) FS. Law Implemented 517.051(5), 517.301, 517.311, 655.001(2)(c), (d), 655.0322, 655.037, 655.0385, 655.0386, 655.057(6), 658.19, 658.20, 658.21, 658.25, 658.26, 658.33, 665.013, 667.003 FS. History–New 5-24-78, Amended 6-9-81, Formerly 3C-10.051, Amended 6-20-90, Formerly 3C-10.0051, Amended 8-14-94, 4-15-98, Formerly 3C-105.206, Amended 10-29-12, _________.

 

69U-105.611 Purchase and Assumption Applications.

The application to acquire 50 percent or more all or substantially all of the assets and/or assume the liabilities of any financial entity of, liabilities of, or combination of assets and liabilities of, any financial institution shall be submitted on Form OFR-U-17.

Rulemaking Authority 655.012(3), 655.414 FS. Law Implemented 655.414 FS. History–New 4-15-98, Formerly 3C-105.611, Amended _________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Jeremy W. Smith, Director, Division of Financial Institutions

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Financial Services Commission

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: August 23, 2022

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: September 12, 2022